Correlation Between Instil Bio and Champions Oncology

Can any of the company-specific risk be diversified away by investing in both Instil Bio and Champions Oncology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Instil Bio and Champions Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Instil Bio and Champions Oncology, you can compare the effects of market volatilities on Instil Bio and Champions Oncology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Instil Bio with a short position of Champions Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instil Bio and Champions Oncology.

Diversification Opportunities for Instil Bio and Champions Oncology

0.66

Correlation Coefficient

Instil Bio  Champions Oncology

Poor diversification

The 3 months correlation between Instil and Champions is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Instil Bio and Champions Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champions Oncology and Instil Bio is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Instil Bio are associated (or correlated) with Champions Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champions Oncology has no effect on the direction of Instil Bio i.e., Instil Bio and Champions Oncology go up and down completely randomly.

Pair Corralation between Instil Bio and Champions Oncology

Considering the 90-day investment horizon Instil Bio is expected to under-perform the Champions Oncology. In addition to that, Instil Bio is 2.23 times more volatile than Champions Oncology. It trades about -0.06 of its total potential returns per unit of risk. Champions Oncology is currently generating about 0.21 per unit of volatility. If you would invest  391.00  in Champions Oncology on September 1, 2024 and sell it today you would earn a total of  61.00  from holding Champions Oncology or generate 15.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Instil Bio  vs.  Champions Oncology

Instil Bio

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Champions Oncology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Champions Oncology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental drivers, Champions Oncology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Instil Bio and Champions Oncology

The main advantage of trading using opposite Instil Bio and Champions Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instil Bio position performs unexpectedly, Champions Oncology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Champions Oncology will offset losses from the drop in Champions Oncology's long position.

The idea behind Instil Bio and Champions Oncology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.